I've been poking around on the web all night trying to find out what's new since I was last reading the PKD-related research a few years ago. Some of it seems promising. There are ongoing clinical trials to look at the role enhanced water consumption might play in slowing down cyst formation in PKD. In one ongoing trial at NYU School of Medicine "Participants will be first asked to drink 6 8-oz glasses of water over 2.5 hours on the first day, and then about 12 8-oz glasses of water over the course of the day for one week." Study won't be completed until November 2009.
http://clinicaltrials.gov/ct2/show/NCT00784030There is at least one conflicting article out there for a study that found some evidence for the reverse effect - that a high level of water consumption was detrimental in an animal model (think it was rats...). But, it seems that most studies are pointing in the same direction - water is a good thing. The water apparently dilutes a compound that exacerbates cyst formation in the collecting tubules of the kidney. There's a technical description here:
http://jasn.asnjournals.org/cgi/content/full/19/1/1The article also mentions some of the findings regarding vasopressin receptor inhibition, which also sounds promising.
The author of the above article is, I believe, the doctor who started the PKD Foundation.
There is another side to this. Drinking too much water, and especially drinking it too fast can lead to hyponatremia (insufficient salt in blood due to dilution). How much water is too much? Seems if you are peeing it out, it's probably okay. "a healthy kidney at rest can excrete 800 to 1,000 milliliters, or 0.21 to 0.26 gallon, of water and therefore a person can drink 800 to 1,000 milliliters of water per hour without experiencing a net gain in water." (see link below). But running a marathon, for example, places enormous stress on the body, and a person's output could go down to 100 milliliters per hour. Drinking large quantities of fluid that aren't being excreted (or sweated out) can lead to water intoxication or even death.
http://www.scientificamerican.com/article.cfm?id=strange-but-true-drinking-too-much-water-can-kill&print=true